For Whither Japan readers who may not have seen them, I present below some other analysts’ views on Japan’s economy and market of which everyone should be aware.

Offering the strong medicine first, I recommend that everyone read and listen to the interview with Kyle Bass, founder and principal of Hayman Capital Management, L.P., conducted by CNBC’s David Faber on January 18 ( http://www.cnbc.com/id/100391704). The article bears the headline “Japan’s Debt Time Bomb Is Ticking.”

Bass makes a few key points—which are indisputable facts—and draws what are coldly logical, but horrific, conclusions, as follows:

At 24 times central government tax revenues, cumulative Japanese government debt has reached a level which ensures financial collapse.

With the Abe/Aso government setting a 2% inflation target, the collapse will occur sooner—probably within the next 18 to 24 months.

The implosion will occur from a sudden “swing in expectations” in the market, as the “procyclicality of thought” that for twenty years has convinced Japanese politicians, businessmen, and investors (especially banks and insurances companies) that JGBs are safe changes in a flashing revelation.

The revelation will be that interest on the debt—currently 25% of national tax revenue—will double under higher interest rates.

The result will be massive JGB selling, a collapsing yen, and systematic financial crisis resulting from a collapse in yen asset prices.

According to Bass, while the losses will be greatest for direct or indirect holders of JGBs, all yen assets classes will plunge, including equities. His comment is “people buying Japanese stocks are picking up a dime in front of a bulldozer.’

Not quite as bracing as the prediction above, but equally meritorious, have been the criticisms of Abenomics from world-class economists of which that of Martin Feldstein writing for Project Syndicate on January 17 is representative. Feldstein points out that:

Seeking to boost economic growth, the Abe/Aso government—having suborned the BOJ—may soon destroy their one great advantage : the low rate of interest on government debt and private borrowing.

The yen has weakened 7% against the U.S. dollar in the past month as markets have anticipated the effects of Abe’s policy of reflation. Yen depreciation vs. the Euro has been even greater.

Inflation and a change in JGB investors’ expectations could force BOJ to allow interest rates to rise to be able to sell new government debt and refinance old.

Even without the prospect of faster inflation and a declining yen, as the annual volume of government debt financing needed will soon reach, and probably exceed, the volume of annual private savings available from Japan’s domestic economy, BOJ will have to let rates rise in order to attract foreign JGB buyers.

Feldstein’s analysis (see www.projectsyndicate.org for the article, which includes more data) supports Bass’s catastrophic thesis. And how could it not? The facts are there, and it is very hard to argue against the logic.

Why, therefore, should anyone be relaxed (after the above, I cannot use the term “optimistic’) about Japan’s economic and financial future? Why, indeed, should anyone now, as Bass vividly portrayed it, “pick up a dime in front of a bulldozer?”

The more positive macro case—involving, firstly, Abe’s retreat from Abenomics after the July Diet upper house elections—and the broader positive micro case--involving adjustments throughout the economy, not least by banks further shortening JGB portfolio duration, and moves by Japan’s best corporations to internationalize operations--is not impossible to make. I will continue to make it.

But I cannot dismiss, and I hope readers will duly consider, the alarms being sounded by Kyle Bass and Martin Feldstein among many others. Most of all, I hope these alarms have been heard and will be duly heeded by politicians and bureaucrats in Tokyo.